AIG to Pay N.Y. $35M to Settle Licensing Allegations

Insurance company American International Group Inc. has agreed to pay New York state $35 million to settle claims that two former subsidiaries did business without licenses and misled regulators about their operations in the state.

The deal was announced on Oct. 31 by New York’s Department of Financial Services. It comes after a $60 million settlement in March with MetLife, which purchased the subsidiaries from AIG.

Authorities had alleged subsidiaries American Life Insurance Co. and Delaware American Life Insurance Co. sought customers in New York without licenses and without telling regulators.

Under the settlement, AIG will drop a legal challenge to the state’s probe and the state will not proceed with charges or a lawsuit.

AIG says it agreed to the settlement to avoid the expense and distraction of litigation.